China’s biggest state-owned steelmaker, Baowu, has taken a big step towards exiting the Queensland coking coal sector, shelling out close to $300 million to settle a disastrous deal that forced it to pay for port and rail capacity it has never used.

Annulment of the costly port contract with the Wiggins Island Coal Export Terminal (WICET) clears the way for Baowu to push ahead with efforts to sell its stake in the Eagle Downs coking coal mine that was intended to fill the WICET port capacity.